Atlas Iron (AGO)

A breakout in the iron ore price in addition to a debt refinancing agreement have driven
Atlas Iron
’s share price in the past 10 days. The iron ore price has jumped to $US132 a tonne, more than 50 per cent higher than its low of $US86 that it reached on September 5. It has prompted a rally in most of the other iron ore miners. What has also underpinned the miner’s price strength was news last week that it had completed its $US325 million refinancing package. The completion of the agreement means that Atlas is on track to meet its Pilbara iron ore production target of 12 million tonnes per year by December 2013. However, analysts warn that the miner’s heavy exposure to iron ore makes it a risk. “Single commodity exposure dependent upon Chinese demand means the shares are only suitable for high risk tolerant investors," Morningstar said. The research house has an “accumulate" recommendation on the stock.